Benefits & Risks

of Social Enterprise

Benefits Risks

Financial Generates sustainable Lose money

source of income Start-up costs higher than
Diversifies revenue willing to commit
streams Traditional nonprofit funders
Reduces donor may decrease support
dependency Opportunity cost (earned
Leverages existing assets income vs. fundraising)
Unrestricted funds
Cost savings in shared
back office
Increases credibility with
Funders
Benefits & Risks
of Social Enterprise
Benefits
Mission Sustainable programming
vehicle
Accountability for
achieving social objectives
Leverages mission
activities and core
competence
Risks
Mission and reputation could
be compromised if the
venture is seen as a sell-out
by stakeholders
Organization has difficulty
balancing mission and
money, causing mission drift
from core social activities to
business
Enterprise could have
negative impact on clients
Benefits & Risks
of Social Enterprise
Benefits
Operations Incorporates organizational
development and business tools
throughout the nonprofit organization
Provides double bottom line context for
management that crosscuts all
functions
Requires organizations to manage
social interest, assets, and investment
Enhances strategic thinking to function
in a dynamic market
Increases efficiency and cost
effectiveness
Improves market responsiveness
Risks
Venture may divert management
and staff attention
Increased organizational
complexity
New systems required to support
enterprise add costs
Business skills needed for
enterprise may necessitate hiring
new staff
Benefits & Risks
of Social Enterprise

Benefits Risks

Culture Innovation Cultural differences of

Entrepreneurship social programs and
Market orientation enterprise may cause
Results orientation tension
Staff may leave due to
"business culture"
Board and staff may feel
sold out
Resistance to change